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SUMMARY
  • Capital is a sine qua non for economic development. Capital grows out of savings of the community. The securities market is the channel through which investible resources are routed to companies. A well-organized and efficiently functioning securities market is conducive to sustained economic growth. Capital market is the market for long-term funds.
  • Corporates have a choice of (i) equity finance and (ii) debt finance. In the liberalized economic environment, the capital market plays a crucial role in the process of economic development. Ability of enterprises to mobilize funds at cheap cost will determine their competitiveness vis-à-vis their competitors in order to perform well in a highly competitive environment.
  • Capital market plays a decisive role in the growth and development of an economy: (i) The capital market serves as an important source for the productive utilization of the savings of the community; (ii) It facilitates capital formation by offering incentives for savings through attractive rates of interest; (iii) It provides an avenue for investors; (iv)It facilitates enhancement of production and productivity; (v) Operations in the capital market induce economic growth; (vi) It promotes stability in values of securities representing capital funds and (vii) Facilitates technological upgradation.

  

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